Financial Analysis: Amazon.com (AMZN) & Its Rivals

Amazon.com (NASDAQ: AMZN) is one of 20 publicly-traded companies in the “Catalog & mail-order houses” industry, but how does it compare to its peers? We will compare Amazon.com to related businesses based on the strength of its institutional ownership, analyst recommendations, profitability, valuation, risk, dividends and earnings.

Profitability

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This table compares Amazon.com and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amazon.com 1.71% 9.23% 2.16%
Amazon.com Competitors -0.91% -1,897.02% -2.41%

Insider and Institutional Ownership

60.2% of Amazon.com shares are owned by institutional investors. Comparatively, 57.2% of shares of all “Catalog & mail-order houses” companies are owned by institutional investors. 17.0% of Amazon.com shares are owned by company insiders. Comparatively, 29.6% of shares of all “Catalog & mail-order houses” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Amazon.com and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amazon.com 0 3 48 1 2.96
Amazon.com Competitors 106 502 1897 48 2.74

Amazon.com currently has a consensus target price of $1,499.48, suggesting a potential upside of 4.02%. As a group, “Catalog & mail-order houses” companies have a potential upside of 30.75%. Given Amazon.com’s peers higher possible upside, analysts plainly believe Amazon.com has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares Amazon.com and its peers revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Amazon.com $177.87 billion $3.03 billion 316.81
Amazon.com Competitors $13.26 billion $329.84 million 35.79

Amazon.com has higher revenue and earnings than its peers. Amazon.com is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Amazon.com has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500. Comparatively, Amazon.com’s peers have a beta of 1.71, indicating that their average share price is 71% more volatile than the S&P 500.

Summary

Amazon.com beats its peers on 10 of the 13 factors compared.

About Amazon.com

Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS) segments. It sells merchandise and content purchased for resale from vendors, as well as those offered by third-party sellers through physical stores and retail Websites, such as amazon.com, amazon.ca, amazon.com.mx, amazon.com.au, amazon.com.br, amazon.cn, amazon.fr, amazon.de, amazon.in, amazon.it, amazon.co.jp, amazon.nl, amazon.es, and amazon.co.uk. The company also manufactures and sells electronic devices, including kindle e-readers, fire tablets, fire TVs, and echo devices; and provides Kindle Direct Publishing, an online service that allows independent authors and publishers to make their books available in the Kindle Store. In addition, it offers programs that enable sellers to sell their products on its Websites, as well as their own branded Websites; and programs that allow authors, musicians, filmmakers, app developers, and others to publish and sell content. Further, the company provides compute, storage, database, and other AWS services, as well as fulfillment, publishing, digital content subscriptions, advertising, and co-branded credit card agreement services. Additionally, it offers Amazon Prime, a membership program, which provides free shipping of various items; access to unlimited streaming of movies and TV episodes; and other services. It serves consumers, sellers, developers, enterprises, and content creators. The company was founded in 1994 and is headquartered in Seattle, Washington.

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